PSUs are augmenting coal-lignite production
Coal companies have undertaken steps such as adoption of Mass Production Technology, embracing Mine Development and Operation (MDO) projects and re-operationalization of abandoned/ discontinued underground mines through MDO under revenue sharing mode.
This update was given by Minister of Coal and Mines G. Kishan Reddy in a written reply in Lok Sabha on 6 Aug, saying that these measures are part of the Government initiated steps to enhance percentage share of underground mining https://www.commerce.gov.in/.
The Minister elaborated, “Underground coal mining offers several advantages, particularly from environmental, land-use, and social perspectives. Since underground mining causes minimal disturbance to surface features, it results in reduced damage to infrastructure, agricultural land, forests, and habitation areas https://www.bseindia.com/.
“From an environmental standpoint, underground mining generates significantly less dust and noise pollution compared to opencast mining. It is also well-suited for extracting deep-seated coal reserves, which are often of higher quality https://www.nseindia.com/.
“Moreover, underground mining leaves a smaller surface footprint, thereby contributing to lower indirect greenhouse gas emissions associated with land degradation and loss of vegetation http://coal.nic.in.”
Reddy further added that underground mines are generally less susceptible to adverse weather conditions such as heavy rains or flooding, which can disrupt surface mining operations. This makes underground mining relatively safer throughout the year due to varying climatic conditions.
He said that the Government has taken steps to promote underground coal mining. In this regard, the methodology dated 28 May 2020 for auctioning coal and lignite mines/blocks for the sale of coal/lignite on a revenue-sharing basis has been amended vide order dated 23 April 2025 to provide specific incentives for underground mines.
These include Reduction of the floor percentage of revenue share to 2% and Complete waiver of the Upfront Amount.
These incentives apply to bidders participating in the auction of coal or lignite mines reserved for underground mining. The successful allocates under this category, availing the above benefits, shall not be permitted to convert the underground mine into an opencast or mixed mine at any stage during the life of the mine https://sbi.com.in/.
The proportion/share of coal production from underground mining in the total coal production of the country during the last five years is given below:
Year and % share of UG production in the total coal production – 2019-20 – 5.54%; 2020-21 – 4.50%; 2021-22 – 4.26%; 2022-23 – 3.90%; 2023-24 – 3.44%.
He pointed out that in countries such as Germany, United Kingdom and Australia, a few closed coal mines have been repurposed into tourist spots, cultural centres, reservoirs or for industrial purposes among others.
Coal and Lignite Public Sector Undertakings (PSUs) have undertaken various repurposing initiatives, such as the development of eco-parks, mine tourism sites, recreational parks, pisciculture in mine voids, solar power projects and other community-oriented facilities.
Some notable examples include:
Bishrampur (Kenapara) and Ananya Vatika in South Eastern Coalfields Limited (SECL);
Saoner Eco Park in Western Coalfields Limited (WCL);
Kayakalp Vatika and Pisciculture at Kerketta Mine Void in Central Coalfields Limited (CCL);
C S Azad Eco Park at Orient Mine No. 4 in Mahanadi Coalfields Limited (MCL);
Sindoor Eco Park and Mango Orchard at Jhanjra in Eastern Coalfields Limited (ECL);
Parasnath Udyan in Bharat Coking Coal Limited (BCCL).
In India, closure and repurposing of coal mines are now undertaken as per the Guidelines for Preparation of Mining Plan and Mine Closure Plan for Coal and Lignite Blocks-2025.
These guidelines emphasize scientific and socially responsible mine closure, including land reclamation, environmental restoration and post-mining utilization for community and economic benefit.
These guidelines provide detailed directions for minimizing long-term ecological damage, rehabilitating land for multiple uses and integrating activities such as agriculture, pisciculture, eco-parks, waterbody restoration, green energy projects and cultural or heritage promotion.
These guidelines also encourage engagement of local communities in operation and maintenance of public spaces, fostering employment and enhancing the cultural relevance of post-mining land use, explained Reddy.
Coal/Lignite PSUs are currently augmenting production to meet the country’s growing energy needs. In cases where a mine is closed due to resource exhaustion, permanent workers are redeployed to other operating mines, ensuring continuity of employment.
Additionally, as per the Mine Closure Guidelines and Corporate Social Responsibility (CSR) policies, PSUs undertake skill development and livelihood programmes for local communities to enhance employability and create alternative income opportunities.
The Guidelines for Preparation of Mining Plan and Mine Closure Plan for Coal and Lignite Blocks-2025 mandate that a minimum of 25% of the five-yearly escrow amount deposited for mine closure is to be utilized for community development and livelihood activities.
Further, these guidelines stipulates that 10% of the final mine closure cost is earmarked for Just Transformation. This amount is to be used in consultation with district administration and stakeholders for socio-economic transition, skill development and sustained livelihood support in post-mining areas, said the Minister. Fiinews.com
